International Business Strategies and Challenges

The assignment discusses various aspects of international business, including strategic planning, market segmentation, differentiation strategies, low-cost strategies, and functional structure. It also highlights the importance of managing global organizations, conducting proper market research, and understanding customer preferences. Furthermore, it touches upon the challenges faced by domestic companies when multinational companies enter their markets.

International business

When organisation do any strategic planning then they are considered each and every
strategies and segmenting market. There are two approaches of strategies which can be followed
by any company. These are differentiation (specialty) and low cost (commodity). In low cost
strategy, company provide their products and services to customers (Strategy: Low Cost or
Differentiation, 2017). For example, if there are two companies who is providing identical
products and selling at same price in market. In this, the one with lower cost will gain advantage
for high level of profits from per sale. Other approach is differentiation strategy, in this
organisation must understand their customers wants and preferences. Through this, business firm
must build their brands in order to maintain their position and visibility in competitive market.
Sony is bets example for both strategies and it extremely effect to market also. A years ago, Sony
was the leader in selling personal music devices which consists high profitability and volume.
Their position was also overcome by using other advanced technologies such as smart phones,
MP3 players and so on. Low cost strategy is effective when new firm is entering into market
with offering innovative products and services.
Managing of global organisation is become business challenge. Manger of multinational
company have to conduct proper market research in order to identify their target customers.
While in industry analysis, main problem which is faced by manager is that customer preferences
(Qi, Zhao and Sheu, 2011). As there are numerous customers and their preferences are also
different from each other. So, it become difficult for company to satisfy their requirements of
each and every customer. Another issue is government policies. Every country has different rules
and policies regarding operating any business. So, manager can face problem in functioning their
business as per requirement of government.
SWOT analysis is an acronym of strength, weaknesses, threats and opportunities. SWOT
can be carried out for organisation, person, product etc. SWOT analysis is considered as complex
for multinational company than domestic because opportunities and threats are connected with
the firm’s external environment. It made more complicated for organisations to carried out
business at international level (Reimann, Schilke and Thomas, 2010). For example, small
business enterprises cannot operate their business at international level. To carry out their
business they need support from governments and funds.
There are many multinational companies which is affecting to local market. The different
organisation is trying to differentiate itself from their competitor’s strategy by providing products
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or services in extra value. Through this, they will attract large number of customers by satisfying
their requirements. Local responsive strategies are not limited for multinational companies which
can afford to set up their overseas subsidiaries. When multinational company enters into other
country with the aim of targeting new customers then it ultimately impacts on domestic
organisation ambitions and objectives (Santos-Vijande, López-Sánchez and Trespalacios, 2012).
For example, if Walmart company enters into any country with the aim of selling number of
products and services at low price to customers then it influences to domestic company in terms
of sales and profits.
Functional structure of organisations is best for those companies who are focusing on
offering single product or service. Small company can also get benefit from functional structure
of product. The advantage of functional structure are specialists. In this, employees are growing
in their field which leads into the development of specialists. The company have to crafted
performance properly then it will also promote visibility of employee skills. It also maximises
performance by sharing valuable expertise with their subordinates. This structure can be adopted
when the aim of organisation is to sale single product in market (Teece, 2010). This structure is
benefit for those organisation who are only focusing on single product or services. For example,
UBER is only focusing on offering single taxies services which is convenient for customers or
clients.
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REFERENCES
Books and Journals
Qi, Y., Zhao, X. and Sheu, C., 2011. The impact of competitive strategy and supply chain
strategy on business performance: the role of environmental uncertainty. Decision
Sciences. 42(2). pp.371-389.
Reimann, M., Schilke, O. and Thomas, J. S., 2010. Customer relationship management and firm
performance: the mediating role of business strategy. Journal of the Academy of
Marketing Science. 38(3). pp.326-346.
Santos-Vijande, M. L., López-Sánchez, J. Á. and Trespalacios, J. A., 2012. How organizational
learning affects a firm's flexibility, competitive strategy, and performance. Journal of
Business Research. 65(8). pp.1079-1089.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Online
Strategy: Low Cost or Differentiation. 2017. [Online]. Available through:
<http://www.cssp.com/strategicplanning/blog/strategy-low-cost-or-differentiation/>.
[Assessed on 15th June 2017].
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